# Sardar Vallabh Bhai Patel University of Agriculture and Technology,Meerut Revisionist v. The Commissioner Commercial Tax U.P. Lucknow

- **Citation:** (2019) 4 ILRA 836
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2019-09-25
- **Case number:** Commercial Tax Revision No. 872 of 2008
- **Bench:** Saumitra Dayal Singh
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/sardar-vallabh-bhai-patel-university-of-agriculture-and-technology-meerut-44957
- **Pages:** 4

## Headnote

A. Tax Law - Uttar Pradesh Trade Tax
Act, 1948: Sections 8-D (1), 8-D (6);
Notification No. 2401 dated 27.04.1987 -
A university established under a separate
enactment was not included as a person made
liable to comply with Section 8-D(1) in
notification. Persons not specified in the
notification would stand excluded from the
requirement to make deduction of tax at
source. (Para 8)

B.
Interpretation
of
clause
(c)
of
notification - The words „corporation‟ and
„undertaking‟ clearly refer to status of the person
as a corporation or an undertaking only, while
university is primarily seen and understood as an
educational institution and not a corporation or
undertaking. (Para 10 & 11)

Commercial Tax Revision allowed. (E-4)

Precedent followed:

## Text

836 INDIAN LAW REPORTS ALLAHABAD SERIES
(2019)12 ILR A836

REVISIONAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 25.09.2019

BEFORE
THE HON'BLE SAUMITRA DAYAL SINGH, J.

Commercial Tax Revision No. 872 of 2008
and
Sales/Trade Trade Revision No. 873 of 2008
and
Sales/Trade Tax Revision No. 874 of 2008

Sardar Vallabh Bhai Patel University of
Agriculture and Technology,Meerut
 ...Revisionist
Versus
The Commissioner Commercial Tax U.P.
Lucknow ...Opposite Party

Counsel for the Revisionist:
Sri P.K. Ganguly, Sri Amrendra Pratap
Singh

Counsel for the Opposite Party:
C.S.C.

A. Tax Law - Uttar Pradesh Trade Tax
Act, 1948: Sections 8-D (1), 8-D (6);
Notification No. 2401 dated 27.04.1987 -
A university established under a separate
enactment was not included as a person made
liable to comply with Section 8-D(1) in
notification. Persons not specified in the
notification would stand excluded from the
requirement to make deduction of tax at
source. (Para 8)

B.
Interpretation
of
clause
(c)
of
notification - The words „corporation‟ and
„undertaking‟ clearly refer to status of the person
as a corporation or an undertaking only, while
university is primarily seen and understood as an
educational institution and not a corporation or
undertaking. (Para 10 & 11)

Commercial Tax Revision allowed. (E-4)

Precedent followed:
1. A.V. Fernandez Vs. State of Kerala, AIR
1957 SC 657 (Para 12)

Present revisions are against order dated
11.04.2008, passed by Commercial Tax
Tribunal, Meerut.

(Delivered by Hon'ble Saumitra Dayal
Singh, J.)

1. The present revisions have been
filed by the assessee against common
order of the Tribunal dated 11.4.2008
passed in Second Appeals No.254/04,
255/04 and 256/04 for A.Y. 2001-02,
2002-03 and 2003-04 respectively, by
which the revenue's appeals have been
allowed and the order passed by the first
appeal authority, deleting the penalties
under Section 8-D(6) of the U.P. Trade
Tax Act, 1948 (hereinafter referred to as
the Act), has been reversed.

2. Undisputedly, facts of the case are
that
the
assessee
is
a
university
established under the Uttar Pradesh Evam
Prodyogik
Vishwavidalaya
Adhiniyam
2000 (U.P. Act No.19 of 2000). During
the assessment years in question, the
assessee
awarded
contracts,
for
construction of college and residence for
staff etc., to three contractors. It made
payments to them without making any
deduction of tax at source. This became
subject matter of penalty proceedings
under Section 8-D (6) of the Act.
According to the assessing officer, the
assessee was obliged to make deduction
of tax at source under Section 8-D (6) of
the Act. Since entire payments were made
without
necessary
deductions,
the
assessee was visited with penalty orders
for the three assessment years.

3. The amount of penalties apart, the
main issue raised by the assessee was that
4 All. Sardar Vallabh Bhai Patel University of Agriculture and Technology, Meerut Vs. The Commissioner Commercial Tax, U.P. Lucknow
837
it was not liable to make deduction of tax
at source and therefore, it did not infringe
the law. That submission found favour
with the first appeal authority which
deleted the penalty. However, the tribunal
has reversed the findings and restored the
penalties.

4. Heard Sri Amarendra Pratap
Singh, learned counsel for the revisionistassessee and Sri B.K. Pandey, learned
counsel for the respondent-revenue.

5. The present revision has been
pressed on the following ground:-

(i) Whether penalty under Section 8D (6) could have been imposed on the
assessee though it was not obliged to
make deduction of tax at source under
notification No. 2401 dated 27.4.1987?"

6. Notification No.2401 dated
27.4.1987 reads as below:

"In exercise of the powers under
sub-section (1) of Section 8-D of the U.P. Sales
Tax Act, 1948 (U.P. Act No. XV of 1948). The
Governor is pleased to notify in the public
interest that the provisions of the aforesaid
section shall not apply to a building contract
other than that between a contractor and

(a) the Central Government or
any State Government or

(b) any local authority; or

(c)
any
corporation
or
undertaking established or constituted by
or under a Central Act or State Act; or

(d) any company; or

(e) any co-operative society or
other
society
club,
firm
or
other
association
of
persons,
whether
incorporated or not."

7. Clearly, the applicability of
Section
8-D
(1)
and
therefore,
requirement to make deduction of tax at
source, had been created specifically with
respect to payments made under contracts
awarded by specified persons, namely, the
Central Government, State Government,
local
authorities,
a
corporation
or
undertaking established under a Central or
State Act or a company or a co-operative
society, or club or firm or other
association
of
person,
whether
incorporated or not.

8. In the first place, a university
established under a separate enactment
was
not
specifically
mentioned
or
included as a person made liable to
comply with Section 8-D (1) of the Act.
Second, separate categories of persons
having been specified under each clause
(a) to (e) of the aforesaid notifications and
thus, made liable to make deduction of tax
at source, all other persons not so
specified,
would
stand
necessarily
excluded from the requirement to make
deduction of tax at source.

9. Though the assessee is a university,
established under a State enactment, clearly, it
is not specified under the notification in
question and therefore, it is not obliged to
make deduction of tax at source. The fact that
there may be some differences in the status of
the assessee university as compared to the
Aligarh Muslim University, would not be
decisive, inasmuch as, the applicability of
notification No. 2401 dated 27.4.1987 did not
hinge on the constitutional or other status of
the university (such as the Aligarh Muslim
University).

10. Keeping in mind the different
category of persons specified under the
aforesaid notification, the assessee clearly
838 INDIAN LAW REPORTS ALLAHABAD SERIES
does not fall under the description of
persons of clauses (a), (b), (d) or (e).
While clause (c) does appear to include
corporations and undertakings established
or undertakings constituted by or under a
Central or State Act, however, it cannot
be read to include within its ambit a
university that primarily is a center for
higher education. Though not defined
under the Act, it is a specie apart from
normal or usual corporate entities. It
derives its identity and character, different
and distinct from statutory corporations
by it's activities, privileges and academic
content. Halsbury's Laws of England (4th
Edition) describes 'Universities' as:

"Para 256. General. A university
is the whole body of teachers and scholars
engaged, at a particular place, in giving
and receiving instruction in the higher
branches
of
learning; such persons
associated together as a society or
corporate body, with definite organization
and acknowledged powers and privileges
(especially that of conferring degrees),
and forming an institution for the
promotion of education in the higher or
more important branches of learning; also,
the colleges, buildings and other property
belonging to such a body. Although the
institutions to which it refers are readily
identifiable,
precise
and
accurate
definition is difficult. The essential
feature of a university seems to be that it
was incorporated as such by the sovereign
power.

Other attributes of a university
appear to be the admission of students
from all parts of the world, a plurality of
masters, the teaching of one at least of the
higher faculties, namely, theology, law or
philosophy (which in some definitions are
regarded as identical) and medicine,
provision for residence and the right to
confer degrees, but possession of these
attributes will not make an institution a
university in the absence of any express
intention of the sovereign power to make
it one. A university involves the relation
of tutor and pupil; it is charged with the
supervision and upbringing of the pupil
under tuition. Incorporation was anciently
effected by papal grant or charter and later
by royal charter or Act of Parliament.

The practice adopted in the case
of the most recent foundations is to
incorporate the university by royal
charter, to which there is annexed a
schedule containing the original statutes
of the university, and thereafter to obtain
the passing of a local Act of Parliament
vesting in the university the property and
liabilities of any institution which it
replaces and making other necessary
provisions.

A copy of any application for a
charter for the foundation of any college
or university which is referred by the
Queen in Council for the report of a
committee of the Privy Council must be
laid before Parliament, together with a
copy of the draft charter, for not less than
30 days before the committee reports
upon it.

The functions of the Secretary
of State for Education and Science, in
relation to universities in Wales, have not
been transferred to the Secretary of State
for Wales."

11. Thus, in the modern sense of the
term, departed from it's origin, it is
difficult to treat universities such as the
assessee as a corporation or undertaking,
especially in the context of the aforesaid
taxing notification, that apparently seeks
to identify different categories of persons,
made liable to deduct tax at source. Used
in that sense, the words corporation and
4 All. Omveer Singh Vs. State of U.P. & Ors.
839
undertaking clearly refer to status of the
person as a corporation or an undertaking
only, while university is primarily seen
and
understood
as
an
educational
institution and not a corporation or
undertaking.

12. Being a provision creating
liability under a taxing status, it has to be
strictly read and no other rule of
interpretation is required to be invoked. In
that regard in A.V. Fernandez Vs. State
of Kerala A.I.R. 1957 S.C. 657, it was
held-

"29. It is no doubt true that in
construing
fiscal
statutes
and
in
determining the liability of a subject to
tax one must have regard to the strict
letter of the law and not merely to the
spirit of the statute or the substance of the
law. If the Revenue satisfies the Court that
the case falls strictly within the provisions
of the law, the subject can be taxed. If, on
the other hand, the case is not covered
within the four corners of the provisions
of the taxing statute, no tax can be
imposed by inference or by analogy or by
trying to probe into the intentions of the
legislature and by considering what was
the substance of the matter."

13. Inasmuch as, the assessee being
a university does not naturally or freely
fall within the description of any of the
persons specified under Clause (a) (e) of
the
Notification
No.
2401
dated
27.4.1987. No attempt is to be made to
force it to fit into description of any
person made liable under the notification.
Hence, the assessee was never required to
make deduction of tax at source on
payment
made
to
its
contractors.
Therefore, no penalty was leviable on that
count.

14. In view of the above, question of
law is answered in the affirmative i.e. in
favour of revisionist-assessee and against
the respondent-revenue. The revision is
allowed.
----------
(2019)12 ILR A839

ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 28.11.2019
BEFORE
THE HON'BLE BISWANATH SOMADDER, J.
THE HON'BLE AJAY BHANOT, J.

Writ Tax No. 1057 of 2019

Omveer Singh ...Petitioner
Versus
State of U.P. & Ors. ...Respondents

Counsel for the Petitioner:
Sri Hemendra Kumar

Counsel for the Respondents:
C.S.C., Sri Akhilesh Kumar Mishra, Sri
Ashok Kumar Mishra

A. Relocation of premises - Uttar Pradesh
Number and Location of Excise Shops
Rules, 1968: Rule 5(2) - There cannot be
any change in the site of any shop or
sub-shop
except
for
"very
cogent
reasons" and that too, such reasons are
required "to be recorded in writing".
(Para 6)

Excise Commissioner while passing the order,
merely referred to the proposal of District
Magistrate, Bijnor who merely reiterated the
observations made by District Excise Officer,
Bijnor. Above mentioned authorities are
ordered to examine the issue afresh, in
accordance with the provisions of law.

Writ Petition allowed. (E-4)

Present petition is against order dated
02.08.2019,
passed
by
Excise
Commissioner, Prayagraj, Uttar Pradesh.